The Ministry of Defence (MoD) should take the DSG (Defence Support Group) ‘tanks’ repair’ contract with defence giant Babcock back ‘in house’, Unite, the country’s largest union, said today (Tuesday 31 July).

The union’s call comes after the MoD pulled the plug on a proposal by Babcock to become a ‘strategic support supplier’ (SSS) for the maintenance and availability of a number of different vehicle types. The MoD cited ‘value for money’ considerations.

Unite argues that the MoD’s decision was influenced by dissatisfaction with Babcock, which brought the Army vehicle repairer, DSG, for £140m in 2015 and has yet to make a profit from the purchase.

Unite said that the latest twist made it imperative that the DSG contract, which involves maintenance and repair services for the British Army’s vehicles, weapons and communications systems, be brought back under MoD control.

Unite national officer for the MoD Jim Kennedy said: “Under Babcock’s stewardship, DSG has gone from a well-run and productive, publicly owned organisation to a private company that no longer provides value for money.

“Our members in DSG want to return to delivering a first rate service for the country and, therefore, we will be calling for an audit of Babcock’s activities and, ultimately, for the DSG to be returned to the MoD.

“Babcock was desperate to win a contract to become the strategic support supplier (SSS) for the maintenance of a number of different vehicle types.

“However, having failed miserably to meet key performance and equipment delivery targets set in its core MoD contract, it is not surprising that the MoD should have decided against putting its entire fleet of army vehicles into Babcock’s basket.

“In an attempt to recoup the vastly overinflated price it paid for the business, Babcock has made some ill-advised changes to DSG; such as removing a number of highly skilled and experienced employees, which now means that it will continue to struggle to meet its core MoD contract.

“The loss of SSS is a massive blow for Babcock as it had hoped there would be sufficient ‘fat’ in the SSS contract to bail out DSG and cover its continued losses.

“MPs have already risen for the summer recess, so the chance for probing questions being raised in the House has been put back to the autumn. Without the SSS, and with the Warrior armoured vehicle turret upgrade looking less likely to go ahead, Babcock is lumbered with a contract that it has yet to make money on.

“The MoD is stuck with getting less value for its money. Ultimately, this is bad for the taxpayer, demoralising for the workforce – and another poor advert for the Tories’ flawed outsourcing agenda.”

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